State Sen. Robert Myers renewed his calls for Congress to exempt Alaska from the Merchant Marine Act of 1920. He says it is an essential step toward avoiding what could be an energy crisis on the horizon.
The law, more commonly known as the Jones Act, stipulates that only American-made, -operated, -registered, and -flagged vessels may ship cargo from one US port to another, without first calling on a foreign port, such as Canada.
For much of the country, the Jones Act is not a top-of-mind issue. But it’s a different story for Alaska, and Myers wants Congress aware of the state’s peculiar predicament: although Alaska is rich in resources like liquid natural gas, it has struggled to exploit them.
The Jones Act is part of that equation.
“Alaska is facing an acute energy shortage,” Myers told a State Senate Transportation Committee. “The Alaska Department of Natural Resources has projected shortfalls in the Cook Inlet natural gas supply beginning in the very near future.”
The Railbelt grid provides electricity to more than 75% of the state’s population. Over 70% of that electricity is generated with natural gas, primarily from Cook Inlet. There are concerns that current production in the inlet could start to experience shortfalls by 2027.
Thankfully, Alaska is rich in liquid natural gas. Getting it to consumers is the hard part. The North Slope reserves, for example, are plentiful but far removed from population centers, and a proposed pipeline project has struggled to find financial backing. It would also take time to complete.
“As such, various utilities are now discussing liquefied natural gas imports to solve the crisis,” Myers said. “Alaska is in a unique quandary in which it prides itself on its oil and gas resources yet is unable to utilize its own natural gas from the North Slope gas fields.”
The simplest, most cost-effective solution would be to transport liquid natural gas from more remote parts of the state to Alaska’s population centers by sea. The problem is that there are no Jones-Act-compliant tankers capable of transporting the fossil fuel at scale, making it illegal for Alaska to ship its own gas to its residents.
Supporters of the Jones Act cite national security exigencies for preventing shipping between U.S. ports from being dominated by foreign vessels. The solution could be as easy as a congressional waiver.
It wouldn’t be the first time.
In 2006, a waiver was granted to tow a jack-up oil rig from the Gulf of America to Alaska for drilling in Cook Inlet. A similar waiver was granted in 2010 in support of oil exploration activities off the coast of Alaska and, then in 2011, when a Russian tanker was allowed to make an emergency fuel delivery to Nome.
Near the end of the hearing, Myers noted Puerto Rico has also begun receiving shipments of liquid natural gas on a French-made tanker purchased by Crowley, a US shipping firm. It is only able to do that due to a loophole in the Jones Act.
